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American  Merchant  Marine 


LETTER  TO  THE  CHAIRMAN 
OF  THE  COMMITTEE  ON  COMMERCE 

TRANSMITTING 

A  COPY  OF  AN  ARTICLE  ON  THE 
AMERICAN  MERCHANT  MARINE 

BY 

LIEUT.  COMMANDER  K.  C.  McINTOSH 

p.  c,  u.  s.  N. 


Printed  for  the  use  of  the  Committee  on  Commerce 


WASHINGTON 

GOVERNMENT  PRINTING  OFFICE 

1919 


73 


COMMITTEE  ON  COMMERCE. 

DUNCAN  U.  Fl4:tCHER,  Florida,  Chairman. 


QEORGE  E.  CHAMBERLAIN,  Oregon. 
JOSEPH  E.  RANSDELL,  Louisiana. 
MORRIS  SHEPPARD,  Texas. 
JAMES  K.  VARDAMAN,  Mississippi. 
JOHN  IC.  SHIELDS,  Tennessee. 
THOMAS  S.  MARTIN,  Virginia. 
JOHN  H.  BANKHEAD,  Alabama. 
FURNIFOLD  McL.  SIMMONS,  North  Carolina. 
JiAMES  A.  REED,  Missouri. 
WILLIAM  F.  KIRBY,  Arkansas. 


KNUTE  NELSON,  Minnesota. 
WILLIAM  ALDEN  SMITH,  Michigan 
WESLEY  L.  JONES,  Washington. 
LAWRENCE  Y.  SHERMAN,  Illinois. 
WARREN  G.  nARDINC.,Ohio. 
BERT  M.  FERNALD,  Maine. 
WILLIAM  M.  CALDER,  New  York. 
HIRAM  VV.  JOHNSON,  Califonua. 
IRVINE  L.  LENROOT,  Wisconsin. 


11 


William  L.  Hill,  Clerk. 

Albert  H.  Roberts.  Assistam  Clerk. 


2 


LETTER  OF  TRANSMITTAL. 


U.  S.  Navy  Aeronautic  Station, 

Supply  Department, 
Pensacola,  Fla.,  February  19,  1919. 
My  Dear  Senator:  I  hope  you  will  not  consider  me  intrusive 
in  writing  you  again.  I  remember,  however,  that  you  were  much 
interested  in  the  subject  of  an  American  merchant  marine  when 
discussed  under  the  awnings  of  the  Tennessee,  and  am  therefore 
taking  the  liberty  of  inclosing  a  copy  of  an  article  on  the  subject 
which  I  have  recently  submitted  to  the  Naval  Institute.  The  data 
is  the  result  of  many  years  of  seagoing,  and  I  firmly  beheve  is  solid 
and  usable. 

Very  respectfully, 

Kenneth  Chafee  McIntosh, 
Lieut.  Commander,  P.  C,  V.  S.  N. 
Hon.  Duncan  U.  Fletcher, 

U.  S.  Senate,  Chairman  Committee  on  Commerce. 


736060 


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AMERICAN  MERCHANT  MARIN?^; 

IT.  S.  C.  N.  ■'     •     -       •  \-^ 


"That's  a  hundred  and  fifty  thousand  dollars  in  his  vest  pocket 
if  he  knows  how  to  use  it  *  *  *.  No;  I  didn't  tell  him  the 
money  value — he'd  send  his  valet  to  find  out." — **The  Captive," 
Kipling. 


I. 

Away  back  in  the  days  of  grand  political  rallies,  of  torchlight  pro- 
cessions and  campaign  songs  and  slogans,  the  days  when  men  went 
about  decorated  with  gold  or  silver  beetles  and  the  air  was  filled 
with  shouts  of  ''Remember  the  crime  of  seventy- three,"  and  answer- 
ing yells  of  "American  tin,"  the  question  of  ships  began  to  stir  and 
trouble  a  few — ^very  few — farsighted  men. 

Ij^A  little  later  it  took  form  as  a  slogan  of  its  own,  and  the  excited 
gentleman  on  the  cracker  barrel  would  wave  his  arms  and  declare 
that  the  issues  before  the  American  people  were  imperialism  and 
ship  subsidy.  When  for  the  last  time  the  American  people  declared 
through  their  representatives  that  they  would  not  have  ship  subsidy 
other  than  for  transporting  the  mails,  that  phase  of  the  question 
subsided,  but  the  question  itseK  would  not  do^vn.  Laws  and  parts 
of  laws  were  repealed,  laws  and  parts  of  laws  were  passed,  and  still 
each  year  saw  us  less  and  less  a  maritime  nation,  more  and  more 
dependent  on  foreign  bottoms  to  move  our  freight. 

For  a  time  it  did  not  seem  to  make  much  difference,  except  as  a 
matter  of  pride  to  the  old  expatriates  of  the  Asiatic  and  the  Mediter- 
ranean, who  looked  sadly  at  the  display  of  British,  German,  Nor- 
wegian and  French  colors  yonder  in  the  bay  and  remembered  when 
that  bay  had  been  full  of  Yankee  clipper  ships.  Then,  little  by  little, 
it  began  to  become  everybody's  question  and  everybody's  worry — 
America  must  have  ships.  • 

Some  years  ago,  as  editor  of  Guam's  monthly  newspaper,  in  a 
desperate  effort  to  fill  up  eight  pages  we  wrote  an  article  entitled 
"Guam  in  the  Future."  It  was  an  anarchistic  and  outspoken 
article;  and  when  some  weeks  later  we  learned  that  no  less  a  person 
than  the  Secretary  of  the  Navy  had  taken  cognizance  thereof  suffici- 
ently to  demand  verification  oi  its  statements  from  the  governor,  we 
shook  in  our  white  canvas  shoes.  But  the  Secretary  did  more  than 
verify — he  disseminated  information.  To  our  infinite  amazement 
we  began  to  receive  letters  from  Members  of  Congress,  from  the 
Land  Office,  from  the  Chambers  of  Commerce  of  San  Francisco, 
Honolulu,  and  Manila,  and  from  the  governor  of  Samoa.  It  was  a 
case  of  make  good  or  back  down,  and  we  attacked  the  probleiti  of 
Guam's  commercial  and  financial  situation  with  an  energy  born  of 

5 


6  AMEKICAN  MERCHANT  MARINE, 

fright.  Immediately  our  head  ran  hard  against  the  stone  wall  of 
''there  are  no  ships,"  We  continued  to  write  and  struggle,  with  the 
very  hearty  backing  of  the  governor;  and  after  scoring  several  flat 
failures,  finally  summed  up  the  problem  as  follows:  ''Without  ships, 
Guam  can  not  market  her  surplus  products  and  will  not  raise  any- 
thing to  balance  her  imports.  Until  Guam  raises  a  surplus  for  ship- 
menc;  no  ships  can  be  induced  to  stop  here.  To  make  the  planters 
work  hard  enough  tc  attract  regular  snipping,  some  one  must  furnish 
a  ship  at  a  temporary  loss."  Apparently  the  Navy  Department 
reached  the  same  conclusion,  and  the  old  Supply  Maru  began  carrying 
copra  to  Manila.  There  are  now  regular  schooner  lines  plying  from 
Guam  both  eastward  and  westward.  The  island  is  started  toward 
economic  independence. 

In  1916  a  Pan  American  trade  congress  was  held  in  Buenos  Aires. 
The  United  States  High  Commission  was  prepared  to  discuss  banking 
and  exchange  problems,  monetary  standards,  and  credit  sj^stems. 
With  one  accord  the  South  American  delegates  cried  for  "Ships! 
ships!  more  ships!"  Without  them  any  system  is  useless,  with  them 
credit  can  quickly  arrange  itself.  At  that  time  Brazilian  planters 
were  begging  smaU  schooners  to  take  away  their  coffee  at  $22  a  ton 
and  over;  and  the  price  of  coal  on  the  Kio  water  front  included  a 
freight  rate  of  110  shillings  a  ton. 

In  1917  the  submarine  stated  the  question  all  over  again  in  sten- 
torian terms,  ending  with  a  thunderous  exclamation  point,  and  tho 
world  suddenly  cried  out  in  agony,  "Send  us  ships  or  we  die!"  We 
stopped  searching  for  the  best,  the  quickest,  and  the  easiest  way. 
We  had  no  more  time  for  study.  We  had  to  build  ships,  and  wo 
built  them,  and  we  now  have  them  in  large  numbers.  So  to-day  wo 
have  on  one  hand  the  same  old  problems  of  trade  development  for 
which  ships  are  the  only  answer;  on  the  other  a  large  number  of 
ships  engaged  in  an  abnormal  trade  which  if  continued  after  the 
emergency  has  passed  will  place  us  in  a  position  antagonistic  to  our 
present  allies  and  our  own  shipowners. 

The  ships  now  at  our  disposal  are  grouped  into  five  classes: 

(1)  American-owned  ships  taken  over  for  the  war. 

(2)  Foreign  ships  chartered. 

(3)  Foreign  ships  requisitioned. 

(4)  Captured  enemy  ships. 

(5)  Ships  built  since  the  outbreak  of  the  war  by  the  Emergency 
Fleet  Corporation. 

Classes  1,  2,  and  3  are  ours  but  temporarily  and  must  go  back  to 
their  owners  in  a  very  short  time.  There  remain  indefinitely  on  the 
Government's  hands  classes  4  and  5,  numerically  in  excess  of  tho 
first  three  classes.  Each  ship  of  classes  4  and  5  represents  a  large 
investment  of  money  obtained  by  the  sale  of  Liberty  bonds,  for  which 
the  taxpayer  will  be  furnishing  interest  for  some  years  to  come.  If 
we  sell  or  lease  the  ships  to  privately-owned  lines  we  must  do  so  at  a 
price  far  below  their  actual  value ;  for  beside  the  depreciating  effect 
of  the  sudden  offering  for  charter  or  sale  such  a  large  tonnage,  our 
laws  do  not  permit  American  ships  to  compete  with  foreign  ones  for 
oversea  business  unless  they  can  in  some  way  materially  reduce  their 
initial  cost 

In  other  countries  initial  and  maintenance  costs  are  both  govern- 
ment-aided by  subsidy.     We  have  definitely  declared  against  any 


AMEEICAN  MERCHANT  MARINE.  7 

form  of  subsidy  other  than  for  carrying  the  mails.  Consequently, 
a  private  company  buying  our  ships  must  beat  us  down  to  a  figiu*e 
which  will  enable  them  to  operate.  We  will  not  get  the  full  price  to 
redeem  the  spent  Liberty  bonds  and  would  have  nothing  but  our 
annual  interest  charges  to  remaind  us  that  we  were  once  shipowners. 
To  meet  this  interest  we  must  tax  a  man  enough  to  pay  him  back 
with  his  own  money.  Similarly,  with  the  return  of  normal  peace 
conditions  and  normal  competition,  any  rental  which  we  could  exact 
for  private  charter  would  barely  return  "us  om*  interest  and  leave  the 
bulk  of  the  people  saddled  with  the  responsibility  of  producing  the 
money  necessary  to  repay  their  maturing  bond  investment.  With 
all  our  distrust  of  the  new  and  untried  in  governmental  procedure, 
we  are  faced  with  the  necessity  of  either  costing  ourselves  and  the 
country  much  money  or  of  running  those  ships  to  profit  ourselves. 
Until  the  last  $50  bond  which  entered  into  the  refitting  and  construc- 
tion of  those  ships  is  repaid,  they  can  not  be  written  into  the  national 
plant  account.  They  represent  an  unfulfilled  debt,  and  we  have  no 
right  to  dispose  of  them  at  a  loss  unless  we  first  declare  ourselves 
nationally  bankrupt  before  our  own  people  and  persuade  them  to 
accept  a  settlement  at  something  under  cent  per  cent. 

The  problem  of  Guam  is  the  problem  of  the  southern  Philippines. 
Many  times  multiplied,  it  is  the  problem  of  South  America,  of  the 
China  coast,  of  the  entire  world  below  the  Tropic  of  Cancer.  When 
the  Government  put  a  sliip  on  the  Guam  run,  the  trade  developed  and 
an  entire  nation,  small  though  it  be,  was  set  upon  the  path  of  in- 
dependence. If  we  do  not  run  our  ships,  we  will  as  a  Nation  lose 
both  money  and  trade.  If  we  do  not  run  our  ships,  we  must  look 
forward  to  undeveloped  islands,  unexploited  markets,  alienated 
friends.  Both  sides  of  the  quandary  are  forcing  us  forward  along  the 
resultant  line.     We  must  run  our  ships  ourselves. 

Immediately  arises  the  first  objection  in  the  form  of  the  rights  of 
private-owned  steamship  companies  operating  under  American 
register.  These  companies  were  plying  their  trade  and  making  a 
living  before  the  war.  At  considerable  inconvenience  and  danger 
to  their  carefully  established  goodwill,  they  patriotically  stood  silent 
while  we  took  their  ships  from  them  and  ran  them  for  the  prosecu- 
tion of  the  war.  Now,  that  we  return  them  their  ships,  shall  we  take 
away  their  trade  by  competing  with  them?  The  Socialists  might 
answer  ^'Yes,''  but  as  yet  they  represent  but  a  small  minority  of 
our  people.  At  the  present  time  such  a  course  would  raise  a  storm 
of  protest  from  every  line  of  business,  from  the  farm  to  the  factory. 
Let  us  avoid  this  objection,  then,  by  resolving  in  the  beginning  to 
leave  these  gentlemen  alone  in  their  fields;  in  the  wide  world  there 
is  room  for  them  and  for  us  and  far  our  allies  as  well.  With 
every  cockboat  in  the  world  working,  there  will  for  a  generation  be 
a  shortage  of  ships,  and  probably  there  will  never  be  as  many  as 
the  world  could  use  at  sluj  one  time. 

A  glance  at  Chart  I  wiU  shed  immediate  light  on  the  problem. 
American  steamship  companies  have  by  no  means  girdled  the  world 
as  yet — have  not  even  attempted  to  cover  the  available  first-class 
trade,  and  have  hardly  touched  the  tramp  trade  at  all.  Surely, 
from  these  few  lanes  we  may  sheer  wide  and  still  employ  all  our 
tonnage.  We  may  even  leave  the  trans-Pacific  field  from  which  the 
Pacific  Mail  retired  after  the  passage  of  the  seamen's  act  in  the  expec- 


8  AMERICA15-  MERCHANT  MARINE. 

tation  that  the  run  will  be  reestablished  after  the  reconstniction. 
If  not  soon  restored,  effort  should  be  made  to  induce  private  com- 
panies to  again  enter  on  the  old  oriental  run;  for  there  is  a  case  of 
market  and  good  will  already  existing,  blown  open  by  Perry's  guns 
in  1854.  As  long  as  there  remains  in  the  world  possible,  logical  trade 
for  American  planters,  manufacturers,  and  merchants,  our  historic 
duty  is  to  open  the  trade,  to  create  good  will  and  demand,  and  then 
to  leave  it  to  the  citizens  of  the  United  States  to  exploit  the  new 
market  we  have  given  them.  The  market  and  the  return  goods  will 
not  be  forthcoming  until  the  ships  arrive  ready  for  business.  The 
private-owned  ships  will  not  gamble  on  a  market  until  they  are 
assured  of  orders  and  a  return  cargo.  And  so,  since  the  days  of  King 
Arthur,  governments  have  sent  out  expeditions  to  the  uttermost 
parts  of  the  earth  to  make  commercial  treaties,  to  exhibit  samples, 
and  to  bring  them  back,  to  create  another  market  for  the  people  at 
home  to  exploit. 

II. 

In  Chart  I  there  appears  but  one  line  south  of  Panama,  and  that 
represents  a  desultory,  semioccasional  run  of  the  Pacific  Mail  to 
Callao,  the  ships  employed  being  the  gallant  survivors  of  an  ancient 
fleet  built  in  the  old  soft-iron  days.  It  is  true  that  there  are  American 
tramps  encircling  South  America  in  the  name  of  W.  R.  Grace  &  Co., 
but  this  company,  huge  and  far-flung  as  are  its  interests,  has  not- 
even  scratched  the  market,  which  was  once  fairly  well  taken  up  by 
the  Germans.  American  shipowners  did  not  trust  the  South  Ameri- 
can run.  They  alleged,  first,  that  credit  was  unsatisfactory;  second, 
that  repeat  orders  were  few;  third,  that  a  return  cargo  was  uncertain. 
The  United  States  in  1915  was  avoiding  South  America  from  experi- 
ences of  the  past,  and  had  not  yet  opened  its  eyes  to  changing  condi- 
tions. 

To  illustrate:  Some  20  years  ago  an  American  firm  was  invited 
to  bid  on  a  large  amount  of  machinery  and  instruments  of  precision 
for  the  Argentine.  The  total  order  was  in  the  neighborhood  of 
$10,000,000,  and  the  company  figured  long  and  carefully.  To  their 
great  resentment,  the  order  went  to  a  German  firm  at  a  figure  slightly 
above  their  bid,  and  thereafter  no  attempt  was  made  to  expand 
their  territory  into  South  America.  And  yet  the  reason  was  based 
on  pure  misunderstanding  of  the  desired  market.  The  drawings 
accompanying  the  American  bid  showed  scales  of  ounces  and  pounds, 
yards,  feet,  and  inches.  In  a  country  which  uses  the  metric  system 
the  natural  thing  to  do  was  to  award  to  the  specification  bidder, 
to  whom  they  already  owed  money,  even  at  a  slightly  higher  price. 

The  manager  of  a  large  department  store  in  Santiago,  Chile,  was 
showing  a  party  of  American  naval  officers  over  his  establishment. 
He  had  been  educated  at  Columbia,  and  had  decided  pro-Gringo 
leanings;  yet  he  led  us  past  counter  after  counter  laden  with  goods 
bearing  the  German  mark.  He  answered  our  question  by  bringing 
out  two  aluminum  saucepans  of  ordinary  size.  One  was  a  heavy, 
honestly  built  affair,  seamless  and  well  finished.  This  was  American 
made.  The  other,  while  of  the  same  size,  weighed  barely  half  as 
inuch,  was  soldered  together,  and  had  a  wooden  handle.  It  bore  the 
famiUar  ''Made  in  Germany"  stamp.  ''Now,"  he  said,  "which  do 
you  buy,  if  you  are  a  Chilean?"     In  view  of  the  obviously  better 


107013—19 


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107013—19 


AMERICAN  MERCHANT  MARINE.  9 

construction  of  the  American  pan,  the  question  seemed  foolish, 
for  the  prices  were  identically  the  same;  but  the  answer  depended 
again  on  knowledge  of  the  market.  The  average  Chilean  cooks  on 
a  Spanish  concrete  stove,  hardly  more  than  an  open  fireplace. 
Flames  play  freely  up  and  around  the  bottom  of  the  pan.  The 
American  metal  handle  grows  intolerably  hot,  so  the  Chilean  looks 
regretfully  at  its  solid  construction  and  buys  the  usable  though 
flimsy  German  product. 

Misunderstandings  of  the  sort  quoted  above  can  be  and  are  rapidly 
being  removed  by  modern  merchandizing  methods.  There  remains 
only  the  age-old  distrust  of  the  Latin-  for  the  man  who  speaks 
English.  This  dislike  of  the  Gringo,  one  may  be  sure,  was  not 
overlooked  by  the  Germans,  who  did  all  they  could  to  keep  it  awake; 
and  as  long  as  a  German  was  persona  grata  in  South  America,  it 
was  a  very  real  obstacle,  for  the  South  American  would  rather  make 
5  per  cent  trading  with  a  friend  than  15  trading  with  a  man  he  does 
not  like.  Conversely,  however,  the  South  American  remembers  his 
enemies,  and  the  fact  that  practically  every  country  south  of  Mexico 
broke  diplomatic  relations  with  the  late  enemy  ig  a  guaranty  that 
his  name  will  remain  a  hissing  and  a  b3nvord  long  after  we  have 
foro:iven  him  and  let  him  buy  and  sell  in  our  market  place. 

The  bulk  of  South  American  trade  was  formerly  German,  but  unless 
we  deliberately  force  Brazil,  Chile,' Peru,  .and  the  Argentine  back  to 
German  markets,  it  will  never  again  be  so.  The  fact  that  we  did  not 
do  the  thing  obvious  to  the  Latin  mind  and  annex  Chihuahua  in 
1915  stands  as  proof  to  our  southern  brethren  that  we  have  no  ambi- 
tion to  dominate  the  Western  Hemisphere  to  their  detriment.  There 
is  also,  reason  to  believe  that  the  thoughtful  work  begun  a  few  years 
ago  will  end  in  a  satisfactory  international  credit  system.  Other 
points  of  contact  being  smoothed  away,  the  merchants  of  South 
America  stand  ready  to  welcome  us  with  the  open  arms.  To  reach 
those  arms  there  must  be  ships.  Private  companies  have  not  got 
the  ships,  nor  will  they  have  until  the  trade  is  solidly  on  a  paying 
basis.  We  have  the  ships,  and  it  is  our  bounden  duty  to  the  coimtry 
to  make  possible  its  entrance  into  that  market.  The  coffee,  sugar, 
and  rubber  of  Brazil,  the  beef,  hides  and  grain  of  Argentina,  the 
nitrates,  copper,  and  minerals  of  Chile  and  the  precious  metals  of  Peru 
await  our  ships  and  their  people  await  the  goods  we  may  make  for 
their  needs. 

III. 

We  have  for  almost  a  generation  been  warned  in  red-hot,  impas- 
sioned language  to  guard  against  the  "yellow  peril.''  From  1905  up 
to  the  outbreak  of  the  great  war,  not  a  year  passed  without  apparent 
and  sometimes  real  danger  of  war  with  Japan,  and  the  possibility  of 
an  awakened  China  and  a  solid  Asiatic  alliance  against  us  was  a 
bugbear  continually  in  sight.  We  know  now  that  the  majority  of 
this  talk  and  the  majority  of  the  friction  with  Japan  may  be  con- 
temptuously laid  at  the  door  of  the  bosche,  who  assiduously  sowed 
the  seeds  of  misunderstanding.  Such  of  the  trouble  as  was  caused 
by  us  or  by  the  Japanese  was  the  direct  outgrowth  of  that  misunder- 
standing, and  also  of  the  other  German  propaganda  and  German- 
ophile  fetish  which  led  Japan  dangerously  near  to  Teutonic  line  of 
thouglit  of  domination  and  supremacy.     Both  parties  now  know  that 


10  AMERICAN  MERCHANT  MARINE. 

they  have  been  duped  by  a  third,  and  that  in  place  of  being  natural 
enemies,  Japan  and  the  United  States  are  logically  friends  and 
business  partners.  As  for  China,  she  is  to-day  and  for  some  time  has 
been  sohdly,  blindly,  and  almost  fatuously  our  friend.  Had  China 
dared,  there  is  every  indication  that  at  several  periods  of  nineteenth 
century  history  she  would  gladly  have  closed  her  ports  to  the  world 
at  large  and  made  the  United  States  and  possibly  Great  Britain  her 
only  creditors  and  customers. 

The  possibility  of  shutting  out  even  Great  Britain  is  in  view  of  the 
opium  trade  from  India,  which  every  Chinese  Government  has  hated 
and  been  unable  to  stop.  Our  position  as  popular  favorite  has  been 
ascribed  variously  to  the  missionaries  and  to  our  return  of  the  Boxer 
indemnity.  Neither  reason  is  a  true  one.  When  the  missionaries  are 
not  inflaming  the  resentment  of  the  inland  and  medieval  Tao  Tsai  or 
the  fanatical  secret  brotherhoods  of  Mongolia,  they  are  furnishing 
exactly  the  same  metaphysical  interest  for  the  philosophical  and  hair- 
splitting Chinaman  as  the  missionaries  of  other  nations.  Even  where 
longest  established  and  most  firmly  settled,  the  missionaries  in  China 
have  made  no  preponderating  impression  on  the  vast  Chinese  people. 
Even  in  Macao,  Jesuit  since  the  fifteenth  century,  Chinese  Mahom- 
medans  predominate,  with  Taoists  a  close  second.  And  in  North 
China,  Marco  Polo  found  a  large  percentage  of  Nestorian  Christians, 
whose  descendents  in  doctrine,  like  the  adherents  of  Thibetan  Lama- 
ism,  consider  themselves  Christians  already  and  considerably  nearer 
to  the  root  of  the  matter  than  the  missionaries  themselves.  As  for 
the  Boxer  indemnity,  not  one  Chinaman  in  a  hundred  thousand  ever 
heard  of  it.  No;  our  popularity  in  China  has  been  built  solely  on  our 
trade  with  China.  Alone  among  the  nations  we  never  ' 'lost  our  face " 
in  the  days  of  clipper  ships.  This  is  not  hard  to  understand  ^\hen  we 
consider  the  men  who  manned  the  old  American  stick-and-string 
merchant  marine — ^hard-featured,  teak-faced  down-easters,  keen  busi- 
ness men,  worthy  opponents  in  sharp  practice,  but  absolutely  men 
of  their  word  when  once  definitely  pirnied  to  a  bargain.  No  one  more 
calculated  to  delight  the  heart  of  a  Chinaman  can  be  imagined. 

Moreover,  in  later  days,  when  our  flag  was  seen  in  the  Orient  onl^ 
on  a  few  large  liners  touching  the  greater  ports,  our  fair  fame  was 
kept  bright  by  the  commercial  missionaries  of  the  Standard  Oil  Co., 
whose  tiny  lamps  and  5-gallon  oil  tins  have  become  a  necessary  feature 
of  the  economy  of  the  most  remote  river  village,  and  so  powerful  a 
factor  for  prosperity,  contentment,  and  education  that  the  Chinese 
Government  is  as  grateful  as  any  government  is  capable  of  becoming. 
The  oil  business  of  China  is  ours,  and  is  being  taken  care  of  hy  private 
enterprise.  Clearly  we  have  no  shadow  of  reason  for  entering  that 
particular  field;  but  is  oil  the  only  American  product  which  China 
would  use  if  she  could  and  which  America  would  ship  if  guaranteed 
a  market  educated  and  waiting?  We  may  even  avoid  competition 
with  Japan  and  leave  her  the  textiles  trade,  which  she  has  captured 
since  the  war  with  Russia.  The  most  superficial  inquiry  should  un- 
earth some  unfilled  need,  not  of  the  China  coast  merely,  but  of  every 
one  of  her  400,000,000  people.  To  begin,  the  fulfillment  of  that 
need  is  legitimate  Government  business,  and  thereafter  the  American 
merchant  and  manufacturer  will  have  another  dependable  source  of 
revenue  and  China  another  reason  for  her  friendship  with  us.  The 
'^yellow  peril"  will  be  pushed  just  that  much  farther  back  into  the 
limbo  of  exploded  bugaboos. 


AMEEICAN  MERCHANT  MARINE.  11 

Moreover,  since  the  German-made  mumbo-jumbo  of  regional 
*^ hegemony"  has  been  laid  to  rest  without  tears,  there  is  no  more 
reason  for  commercial  antipathy  between  the  United  States  and 
Japan  than  there  is  for  a  war  between  John  Wanamaker  and  Andrew 
Carnegie.  Four  hundred  million  Chinamen  eat  and  wear  and  play 
with  more  than  both  of  these  countries  can  ever  sell  them.  Besides, 
we  are  fairly  good  customers  for  each  other,  and  can  be  better  ones 
if  we  like. 

IV. 

The  ever-reliable  and  dependable  World  Almanac  not  being  at  hand, 
I  am  unable  to  state  the  population  of  the  southern  Philippines. 
However,  there  are  several  hundreds  of  thousands  and  possibly  sev- 
eral millions  of  people  there  in  a  state  of  civilization  which  grades 
from  something  better  than  the  absolute  primitive  to  something  con- 
siderably less.  The  Moro,  after  substituting  Islam  for  Rome,  may  be 
taken  as  a  fairly  good  picture  of  our  crusading  ancestors,  with  his  love 
for  arms,  high  standards  of  personal  honor,  and  easily  touched  pride. 
He  represents  the  upper  level  of  the  population,  the  lower  approximat- 
ing the  Hottentot,  who  can  carry  on  a  free  and  untrammeled  conver- 
sation with  a  dog-faced  baboon.  We  are  attempting  to  civilize  them 
with  schools  and  churches.  We  may  succeed  in  pacifying  them 
entirely  by  those  methods,  but  unless  we  return  to  the  Jesuit  tyranny 
of  300  years  ago  we  will  never  make  them  producing  members  of  the 
community  by  either  religion  or  education.  We  must  show  them 
something  desirable  which  they  can  gain  only  by  working  better  and 
harder  than  is  necessary  to  live  as  did  their  grandfathers:  we  must 
create  a  need.  Once  felt,  that  need  will  do  more  than  any  teaching 
to  induce  husbandry,  trade,  and  thrift.  The  old,  disreputable  Black- 
birders  realized  this  and  steered  clear  when  possible  of  ports  where 
missionaries  were  to  be  found.  They  were  implanting  the  needs 
easiest  to  create — gin  and  guns — and  wished  no  interference.  At 
that  they  did  not  coUect  in  their  busiest  days  1  per  cent  of  the  pos- 
sible exportable  goods  of  the  islands,  and  they  caused  no  greater 
expenditure  of  labor  than  is  necessary  to  pick  up  dry  coconuts  and 
sea  snails.  The  industry  of  the  southern  islands  and  of  the  South 
Seas  in  general  is  gauged  by  the  price  of  hardtack,  canned  salmon,  and 
blue  denim.  Here  is  a  fertile  field  for  endeavor,  and  again  we  crash 
against  the  same  old  obstacle — without  ships  there  will  be  no  cargo; 
without  cargo  there  will  be  no  ships.  Again,  it  is  the  historic  duty  of 
the  Government  to  enter  the  first  wedge  and  drive  it  home.  Those 
islands  will  one  day  be  developed  to  enormous  and  valuable  trade  by 
some  one.  It  is  logically  ours,  even  if  we  abandon  the  Philippines  at 
some  future  date,  for  Americans  are  the  only  whites  in  the  world  for 
whom  the  Moros  and  the  lesser  nations  of  the  Southern  Archipelago 
have  ever  felt  the  slightest  respect.  They  have  liked  us  and  consid- 
ered us  capable  and  worthy  opponents  even  while  splitting  our  heads 
with  a  bolo,  for  unlike  the  Tagalog,  the  southern  islander  bears  no 
malice  and  admires  a  good  sportsman. 

One  item  which  the  trend  of  matters  in  the  civiUzed  world  will 
soon  demand  insistently  from  the  South  Seas  is  copra.  The  war 
has  taught  the  world  the  absolute  necessity  of  fats  and  oils,  and 
while  the  steady  decrease  of  the  world's  animal  herds  has  in  the  past 
been  a  subject  for  uneasy  headshaking,  it  is  now  becoming  a  question 


12  AMERICAN   MERCHANT  MARINE. 

of  dire  and  immediate  urgency.  Cottonseed  oil,  peanut  oil,  olive  oil — 
these  and  more  are  being  feverishly  developed  to  replace  the  rapidly 
diminishing  supply  of  edible  animal  fats;  but  greater  than  any  of 
these  and  as  yet  almost  untouched  in  coconut  oil  and  its  by-products. 
Nine-tenths  of  the  world's  copra  is  the  result  of  some  tattered  or  even 
naked  islander's  wanting  a  bottle  of  beer  or  a  can  of  salmon.  In  a 
few  places  copra  is  being  systematically  grown  and  dried,  notably  in 
Samar;  but  even  in  Samar  the  output  is  limited  by  the  transporta- 
tion and  the  fact  that  no  particular  reason  has  been  offered  to  spur 
the  native  to  regular  effort,  and  Samar  copra  is  not  of  the  best 
quality  at  that.  Copra  has  been  long  a  neglected  asset  of  the  world, 
and  until  the  establishment  of  the  India  Products  Co.  of  Philadelphia, 
practically  the  only  markets  for  high-grade  copra  were  Hamburg  and 
Marseille.  Even  there,  its  use  was  largely  confined  to  toilet  articles 
and  its  food-value  overlooked.  And  even  with  this  limited  and  fickle 
market,  medium-grade  copra  was  worth  $12  per  hundredweight  on 
the  docks  of  Marseille  as  long  ago  as  1911.  With  a  very  little  effort 
on  our  part,  the  South  Sea  output  of  copra  could  be  multiplied  by 
500,  with  a  consequent  gain  to  the  world's  supply  of  fats;  and  every 
pound  of  it  could  be  carried  in  American  bottoms  and  should  be. 
And  every  cent  of  its  purchase  price  at  the  beach  could  and  should 
be  spent  on  American  goods  brought  in  American  ships.  The  desires 
of  the  islanders  now  range  from  beads  and  red  calico  to  gilt  mirrors 
and  musical  clocks.  We  have  the  ships  to  develop  this  trade,  and  if 
we  do  not  use  them,  we  will  be  omitting  one  of  the  historic  duties  of  a 
Navy  to  the  Nation  that  supports  it. 

Another  item  which  we  can  and  must  cultivate  in  these  islands  is 
kapok,  or  tree  cotton.  In  1912,  samples  of  Guam  kapok  sent  to  the 
Cotton  Exjchange  of  New  Orleans  for  information  as  to  its  commercial 
possibilities  elicited  the  reply  that  it  would  not  spin  or  gin  and  was 
valueless.  In  1913,  not  18  months  later,  the  burning  of  a  single  ware- 
house full  of  kapok  in  Manila  caused  a  rise  in  price  of  $150  per  ton. 
Kapok  had  found  its  use,  and  the  world  was  clamoring.  It  consti- 
tutes practically  an  Am3rican  monopoly  at  present,  and  while  the 
Navy  alone  can  come  near  to  using  the  world's  entire  output,  that 
output  measures  only  desultory  gathering  from  age-old  trees.  No- 
where has  kapok  been  established  as  a  main  line,  nor  has  it  been 
planted  and  cultivated,  yet  from  the  jungles  of  Guam  alone,  some 
20  tons  could  be  gathered  annually.  Guam  is  30  miles  by  9  in  its 
gr-eatest  dimensions,  and  its  kapok  trees  are  far  enough  apart  to 
be  noteworthy  when  found.  When  we  bring  goods  of  home  manu- 
facture to  the  islands  sufficiently  desirable  to  make  the  effort  worth 
while,  there  is  practically  no  limit  to  the  kapok  we  can  take  away. 

Trepang  or  ''beche-de-mer"  has  a  ready  sale  in  China  and  tons« 
more  than  have  ever  been  cured  cumber  the  beaches  and  embarrass 
the  swimmer  in  every  South  Sea  island.  Millions  of  feet  of  hard- 
woods wait  the  enterprise  of  the  judicious  forester;  shiploads  ot  dye- 
woods  and  spices  are  there  to  be  taken  awa}-.  Coals  and  metals  lie 
waiting  to  be  mined  in  these  southern  islands.  The  trade  of  the 
world  needs  them  all;  but  the  ships  of  the  world  must  see  them 
waiting  on  the  dock  before  they  will  call.  We  must  not  only  putt 
them  on  the  dock,  but  build  the  dock  as  well. 


AMERICAN   MERCHANT  MARINE.  H 

V. 

Some  philosopher  once  made  the  discovery  that  the  darkest  place 
in  the  room  is  exactly  under  the  candlestick.  To  look  at  the  chart 
it  would  appear  that  the  Caribbean  and  the  Gulf  were  fairly  well 
covered  by  existing  steamship  lines.  It  is,  then,  rather  a  shock  to 
the  inquisitive  American  when  he  inspects  the  wares  of  the  average 
shop  in  the  average  West  Indian  town.  I  do  not  mean  Habana  or 
San  Juan,  for  these  cities  have  long  had  a  definite  trade  link  with  the 
United  States,  and  the  ships  and  merchandise  have  appeared  to 
handle  and  balance  it.  But  we  have  also  for  many  years  had  direct 
and  frequent  communication  with  Santo  Domingo  by  way  of  the 
Clyde  Line;  yet  in  the  normal  Dominican  shop  we  find  Danish  butter 
and  herring,  German  lamps,  clocks,  and  trinkets,  French  canned 
goods,  and  a  multiplicity  of  Spanish  wares.  Such  American  goods 
as  are  shown  are  of  a  grade  not  salable  in  the  United  States,  with  the 
exception  of  bottled  beers  and  refrigerators  to  keep  them  in.  Half 
of  this  American  export  list  wiU  soon  stop,  and  its  absence  may  stop 
the  other  half.  This  poor  showing  in  the  shops  of  so  near  a  neighbor 
has  solid  reasons,  heretofore  potent,  but  now  removable  by  taking 
thought.  First  of  all,  since  the  days  of  President  Grant  in  Wash- 
ington and  President  Baez  in  Santo  Domingo,  the  fear  of  annexation 
has  led  the  Dominican  to  open  hatred  of  '4os  Yanquies."  Since  our 
war  with  Spain  this  dread  has  at  times  become  hysterical.  As  the 
bishop  of  Santo  Domingo  expressed  the  popular  feeling,  ''Puerto 
Rico — Guant anamo — Panama — Nicaragua — Haiti — St.  Thomas — 
and  now  you  are  sitting  in  our  forts."  ' '  Better  the  head  of  a  rat  than 
the  tail  of  a  lion,"  cries  the  Dominican.  But  since  our  military 
occupation  this  feeling  is  changing.  Admiral  Knapp  has  been  a 
revelation  to  Santo  Domingo,  and  they  begin  to  believe  that  our 
purpose  is  much  more  to  preserve  the  integrity  of  their  republic  than 
to  destroy  it;  that  annexation  by  the  United  States  is  possible  only 
as  a  last  resort  to  prevent  their  annexation  in  part  or  in  whole  by  a 
European  power.  They  also  are  undergoing  an  era  of  solidity  and 
progress  which  passes  their  wildest  dreams — even  outruns  the  plans 
of  the  late  and  unlamented  Leli  Heurreaux,  who  compensated  his 
lack  of  justice  and  morality  by  a  real  patriotism  and  breadth  of 
vision.  The  anti-Yanqui  feeling  is  being  rapidly  conquered,  and 
even  at  the  beginning  of  the  occupation,  many  prominent  Dominicans 
were  being  bitterly  lampooned  in  the  patriotic  press  as ' '  ayanquizados." 

Communication  is  now  existing  here,  and  the  only  need  is  for  a 
bit  of  careful  merchandizing  to  multiply  our  Dominican  trade  many 
times.  The  other  end  of  the  island,  Haiti,  is  virgin  territory;  and 
legitimate  ground  for  our  endeavor.  Already  the  majority  of  in- 
vested industrial  capital  is  ours.  We  are  to  build  Haiti's  roads, 
railways,  and  docks.  Should  not  Haiti's  payment  of  chocolate, 
dyewoods,  and  coffee  come  to  us  in  our  own  ships?  Lasting  good 
will  has  already  been  gained  and  the  sound  of  *'Caco  fini!"  brings  a 
grin  of  pure  delight  to  every  black  face  in  the  agricultural  part  of 
the  country. 

The  east  coast  of  Central  America  is  worked  after  a  fashion  by  the 
United  Fruit  Co.,  the  Central  American  Trading  Co.,  and  Hubbard- 
Zemurray.  American  goods,  more  or  less  adapted  to  the  market, 
are  floated  down  the  coast,  but  what  these  gentlemen  chiefly  want 


14  AMERICAN  MERCHAl^T  MARINE. 

for  the  return  trip  is  a  cargo  of  bananas.  They  will  take  other 
freight  gladly  if  presented  for  shipment  and  if  there  is  room  in  their 
holds.  There  has  never  been  any  violent  effort  made,  however,  to 
induce  much  production  aside  from  fruit,  and  while  the  banana  trade 
has  no  doubt  been  lucrative,  the  fact  that  the  republics  between 
Mexico  and  Panama  live  mainly  by  the  desultory  peon  labor  of  the 
fruit  plantation  has  made  possible  the  never-endmg  series  of  revolu- 
tions and  gunboating  jobs  that  have  been  ours.  Why  not  spend 
some  of  the  time  we  use  in  preserving  law  and  order  by  doing  a  little 
trade  missionary  work  which  will  inevitably  lead  to  more  settled 
conditions  ?  A  busy  man  dodges  a  fight,  and  an  idle  one  is  apt  to 
pick  one. 

The  marines  in  Managua  have,  as  usual,  produced  the  opposite 
from  the  effect  which  was  expected  by  the  Latin-American  world. 
Instead  of  continuing  a  sore  spot  and  an  offense  against  Nicaraguan 
sovereignty,  they  have  convinced  all  hands  that  we  do  not  wish  to 
either  conquer  or  annex  Nicaragua.  Let  it  also  be  remembered  that 
all  of  these  countries  joined  us  in  breaking  relations  with  the  Hohen- 
zollern  government.  Most  of  them  had  no  particular  reason  for 
doing  so;  but  their  action  is  a  measure  of  their  wild  enthusiasm  at 
what  they  consider  a  guaranty  of  their  future.  There  were  many 
of  them  who  believed  us  a  bully  of  small  nations  and  a  coward  toward 
big  ones..  When  we  openly  tackled  the  biggest  and  fearfullest  bully 
in  the  world,  their  excitable  Creole  hearts  flared  into  similar  action. 
With  the  Central  Americans  we  have  ''made  more  character"  in  the 
past  two  years  than  in  any  previous  fifty,  and  their  friendship  and 
their  trade  are  ours  to  pick  up  if  we  will. 

On  the  west  coast  the  same  psychological  advantage,  long  unat- 
tainable, is  now  ours;  and  here  we  have  not  even  a  line  of  casual 
fruit  steamers — ^we  have  practically  nothing  but  the  semioccasional 
staggering  old  Pacific  Mailer  ambling  in  between  visits  of  the  somno- 
lent Pacific  Steam  Navigation  Co.  and  the  spasmodic  C.  S.  A.  V. 
The  Cosmos  Line,  an  offshoot  of  the  Hamburg- American,  was  rapidly 
absorbing  all  the  cream  of  the  West  coast  from  Mazatlan  to  Chiloe, 
and  the  Cosmos  Line  is  now  out  of  business  and  out  of  favor  every- 
where but  in  Mexico.  Is  there  any  reason  why  the  copper  mined  by 
the  Guggenheims  in  Chile,  the  silver  taken  from  the  street  of  Cerro  de 
Pasco  by  the  Palmer  Syndicate,  the  mahogany  cut  by  American 
firms  and  floated  down  to  San  Marcos  Bar  and  Salina  Cruz  should 
not  be  freighted  away  in  American  ships,  built  and  manned  in  the 
United  States  ?  If  it  paid  a  German  liner,  12,000  miles  out  of  Ham- 
burg, to  work  42  ports  from  Valparaiso  to  San  Francisco,  stopping 
to  ''land  a  cabbage  and  a  barrel  of  water  and  take  on  an  old  woman, 
and  a  parrot,''  why  should  it  not  pay  an  American  freighter,  4,000 1 
miles  out  of  San  Francisco  or  2,000  out  of  New  Orleans  ? 

The  country  is  weary  of  the  long  feud  between  rail  and  water  borne: 
traffic  which  has  kiUed  the  once-glorious  Mississippi  and  partially 
paralyzed  the  Panama  Canal.  Moreover,  the  railroads  are  weary  and' 
the  shipowners  are  weary.  Indeed,  this  seems  to  be  another  rivalry, 
of  the  past  which  has  been  made  sill^  beyond  aU  measure  by  national; 
growth.  There  are  not  enough  freight  cars,  and  freight  cars  and: 
ships  together  are  none  too  much  to  handle  the  coast-to-coast  busi- 
ness. Building  many  more  railroads  is  slow  and  costly — the  ships 
are  in  our  hand;  and  imless  those  ships  are  used,  some  good  profitable^ 


AMERICAN  MERCHAIS'T  MArjN"E.  16 

coast-to-coast  trade  will  not  be  carried  on.  Their  use,  incidentally, 
should  land  a  few  heavy  punches  on  the  solar  plexus  of  our  national 
tyrant,  the  high  cost  of  living.  It  should  not  be  difficult  for  a  Gov- 
ernment-operated line  to  keep  cargo  rates  at  a  figure  which  will 
permit  the  struggling  railroads  to  carry  their  normal  capacitv  and  so 
reorganize  their  overdriven  systems.  There  will  be  enough  left  over 
after  the  freight  cars  are  laden  to  send  more  than  one  vessel  through 
the  canal  down  to  her  PlimsoU  mark. 

VI. 

The  same  factors  which  have  contributed  to  the  spectacular  and 
world-wide  collapse  of  the  German  merchant  fleet  and  German-made 
good  will  have  placed  ships  in  our  harbors  and  good  friends  on  our 
calling  list.  Before  the  war,  the  ships  of  our  aUies  were  working  to 
capacity,  and  so  were  the  ships  of  neutrals.  Tlie  submarine  has 
decreased  those  busy  fleets,  but  they  will  be  soon  reconstituted. 
Meanwhile,  there  remains  the  huge  vacancy  left  by  the  withdrawal  of 
German  ships  and  German  friendliness. 

Not  a  single  article  of  commerce,  not  a  single  pound  of  freight  has 
been  so  far  mentioned  in  this  article  to  which  any  of  our  friends 
ever  laid  the  shadow  of  a  claim.  Our  late  enemies  once  gained  this 
trade  more  by  lying  about  us  than  by  open  competition,  more  by 
our  owTi  restrictions  on  our  ships  than  by  their  superior  merchandizing 
ability. 

The  trade  is  there  and  the  ships  are  here.     Go  to  it,  America! 

VII. 

By  this  time  probably  every  reader  is  wondering  what  will  becom  o 
of  the  fleet,  if  all  this  comes  to  pass,  if  the  Navy  keeps  and  operates 
this  great  United  States  commerce  navy.  Operating  modern  men-of- 
war  is  not  a  stationary  science  in  any  of  its  branches,  and  a  lifetime 
can  be  profitably  spent  in  study  and  effort  to  perfect  oneself  in  any 
one  of  an  officer's  many  duties.  The  gunboat  officer,  though  doing 
strictly  naval  work,  often  laments  that  ''By  the  time  I  get  back  to 
the  fleet  I  won't  be  able  to  even  put  a  name  on  half  the  gadgets  I 
see!"  While  officers  and  men  are  plying  around  the  world  discharg- 
ing tinned  tomatoes  and  taking  on  teakwood  and  tea,  what  will 
become  of  their  fighting  education  ?  If  it  be  necessary  for  the  Regular 
Establishment  to  man  our  commerce  fleet,  the  ships  must  lie  idle,  for 
even  in  the  unheard-of  contingency  of  Congress  authorizing  a  regular 
Navy  of  any  such  size,  such  duty  would  guarantee  that  a  good  75 
per  cent  of  our  expensively  educated  officers  would  soon  become 
professionally  behind  the  times  and  exceedingly  mediocre  in  the 
performance  of  their  legitimate  Naval  duty.  The  fighting  fleet  must 
remain  the  fighting  fleet,  without  any  further  amount  or  profession- 
ally stagnant  duty  than  it  now  has  of  necessity.  Fighting  ships, 
like  fighting  men,  must  be  drilled,  drilled,  drilled  until  the  human 
approximation  of  perfection  is  reached,  or  they  are  something  less  in 
value  than  the  country  has  paid  for.  By  the  time  a  midshipman  has 
been  given  a  groundwork  which  will  fit  him  for  specialty  work  as 
engineer,  gunnery  officer,  aviator,  radio  or  torpedo  man,  metallurgist 


16  AMERICAN  MERCHANT  MARINE. 

or  ballistician,  in  addition  to  being  a  seaman  and  a  navigator,  he  is 
far  too  valuable  to  be  allowed  to  rust  as  third  mate  of  a  tramp 
freighter  or  even  of  the  Leviathan.  We  must  keep  a  keen  edge  on 
our  sword,  and  we  can  not  do  that  if  we  use  it  as  an  ax  or  a  ho^. 

The  answer  has  already  been  ably  presented.     The  officers  and 
crews  of  our  Government-operated  ships  should  not  be  selected  hap- 
hazard from  the  Tarry-Johns  of  the  world.     They  must  be   our 
officers  and  men,  upon  whom  we  may  depend  in  time  of  war  or 
threatened  war;  for  moderp  war  has  made  the  freighter  as  great  a 
factor  as  the  fighter,  and  we  must  never  again  have  to  educate  pro- 
fessionally our  transport  and  train  complement  after  hostilities  have 
begun.     The  commerce  fleet  must  be  manned  by  a  personnel' just  as 
entirely  at  the  command  of  the  Navy  Department  as  are  we  of  the 
Regular  Establishment.     They  must  form  a  permanent  naval  reserve. 
If  at  some  future  date  it  again  becomes  necessary  for  us  to  take  over 
commercial  ships  for  war  purposes,  we  must  not  be  delayed  and  the 
fleet  must  not  be  hindered  by  having  to  make  crews  and  furnish 
officers  for  them.     At  the  outbreak  of  hostilities,  the  Navy  should 
be  called  on  for  nothing  more  than  divisional  or  convoy  commanders, 
guns,  and  gunners.     The  ships  should  be  ready  to  operate  as  they 
stand  and  steam,  their  commanders  proceeding  on  their  wartime 
errand  without  wasting  more  time  than  is  necessary  to  get  out  their 
mobilization  orders  from  the  safe  and  tear  open  the  envelope.     Men 
and  ships,  the  commerce  fleet  must  be  Naval  Reserve.     Their  pay 
and  maintenance  must  not  be  charged  against  the  Navy  except  when 
they  are  actuallv  mobilized  but  must  be  covered  by  the  proceeds  of 
their  voyage.     We  must  avoid  even  the  appearance  of  expense  to 
the  taxpayer.     He  has  not  always  the  time  to  examine  both  sides  of 
the  ledger,  but  he  is  sure  to  see  the  annual  total  of  the  appropriation 
biU. 

There  need  be  no  fixed  period  for  enlistment  in  this  reserve;  in 
fact,  if  we  fix  a  term  of  sufficient  length  to  insure  a  solid  training 
we  might  have  difficulty  in  recruiting.  Men  and  officers  should  feel 
free  to  leave  at  the  end  of  short  periods — say  after  a  term  of  six 
months  for  enlisted  men  or  a  year  for  an  officer.  They  must,  if  they 
so  leave  the  service,  hold  themselves  in  readiness  for  call  in  time  of 
war  for  some  years  afterwards ;  and  naturally  they  would  bv  so  doing 
lose  any  benefits  of  continuous  service  and  longevity  which  tKey  might 
otherwise  receive.  Ratings  for  men  should  be  as  far  as  is  necessary, 
the  same  as  in  the  Regular  Establishment,  carry  the  same  rates  of 
pay  and  the  same  four-year  increases.  Rank  for  officers  should  grade 
from  cadet  (midshipman)  up  to  and  including  lieutenant  commander 
for  the  deck  and  engine  room  in  time  of  peace,  up  to  and  including 
the  rank  of  lieutenant  for  the  supercargoes,  pursers,  and  doctors. 
The  control  and  center  of  this  Reserve  must  be  situated  in  the  Navy 
Department,  and  a  regular  officer  with  the  rank  of  rear  admiral  and 
the  title  of  chief  of  operations  (commerce)  should  be  their  com- 
mander in  chief  under  the  Chief  of  Bureau  of  Operations.  His  duties, 
however,  should  have  to  do  solely  with  the  enrollment,  detail,  and 
discipline  of  the  Reserve  personnel. 

The  ships  themselves  must  in  the  nature  of  their  pioneering  duty 
be  closely  in  touch  with  the  internal  and  merchandising  conditions 
of  the  country;* and  so  our  commerce  fleet  directorate  can  not  hope 
to  be  successful  under  the  guidance  of  seagoing  officers  only,     it 


AMBRIOAN   MERCHANT  MARIITE.  17 

must  be  closely  affiliated  with  the  Navy,  also  with  the  Consular 
Corps,  but  more  than  either,  it  must  be  cirilian,  nonpartisan,  and 
commercial.  The  following  make-up  of  the  board  of  directcirsr, 
U.  S.  C.  N.,  is  suggested: 

Chairman,  ex  officio,  the  Secretary  of  the  N*vjr. 

The  chief  of  operations  (Commerce). 

Directors  elected  by  the  Chamber  of  Commerce  of — 

New  York 2 

Chicago 2 

Boston 

Philadelphia. 

Baltimore 

Norfolk 

Savannah 

New  Orleans 

Mobile - 

Galveston 

San  Francisco 

Seattle 

Honolulu ,  -  - 

Manila 

Nonvoting  attaches  to  the  board  of  directors,  8,  as  follows: 

From  the  staff  of  the  commander  of  train,  U.  S.  N 

From  the  Bureau  of  Supplies  and  Accounts,  U.  S.  N 

From  the  Consular  Corps,  State  Department 

From  the  Department  of  Agriculture 

From  the  Department  of  Commerce.^ 

Delegated  by  the  Pan  American  Union 3 

Elected  by  the  board  of  directors,  2  secretaries. 

Our  United  States  commerce  navy  begins  to  take  definite  and 
feasible  shape. 

VIII. 

For  purpose  of  determining  cost,  it  would  appear  that  the  only 
feasible  method  of  estimate  will  be  to  as  near  as  possible  average 
the  ships  into  classes.  Roughly  we  can  divide  our  commerce  fleet 
into  four  types,  i.  e. : 

1.  2,000  tons,  or  ''lake"  class. 

2.  5,500  tons,  or  ''western"  class. 

3.  7,500  tons,  of  the  Emergency  Fleet  Corporation  type. 

4.  Captured  vessels. 

An  approximation  of  cost  which  will  not  be  less  thian  actual  necessi- 
ties will  enable  us  to  determine  the  freight  tariff  which  will  enable  us 
to  operate;  and  in  fixing  this  tariff  we  must  bear  in  mind  that  the 
main  duty  of  the  commerce  navv  is  to  open  new  fields  as  soon  as 
possible,  and  that  at  present  tarifl  rates  are  abnormally  high,  and  so 
can  not  be  taken  as  a  permanent  basis  for  figuring.  Actual  cost,  plus 
20  per  cent  overhead,  divided  by  probable  average  tonnage  of  cargo, 
must  be  our  minimum  to  break  even.  If  we  have  then  latitude  to 
collect  a  bit  of  interest  on  our  investment,  the  taxpayer  wins.  If  we 
have  not,  he  does  not  lose.  Either  way  the  country  wins.  There- 
fore, oiu"  only  real  problem  is  to  find  out  if  we  can  operate  without  a 
Government  annual  appropriation  to  meet  expenses. 

First,  cost  of  operation  and  overhead.     It  will  be  necessary  only  to 

estimate  on  the  smaller  type  of  captured  liners  to  discover  whether 

they  can  be  made  to  pay.     Under  normal  peace  complements  and  a 

regular  rim,  the  George  Washington  should  require  an  annual  upkeep 

107013—19 2 


t8  AMERICAN  MERCHANT  MARINE. 

of  not  more  than  180  per  cent  of  the  Antigone:  but  her  carr\nng 
capacity  will  reach  300  per  cent.  Consequently,  if  the  Antigone  can 
work  to  profit,  so  can  the  larger  ships.  What  complement  will  she 
require,  what  stores,  what  provisions,  how  much  coal?  In  the  fol- 
lowing table,  I  realize  that  most  naval  officers  will  consider  me  as 
having  sent  a  ship  to  sea  undermanned,  and  most  ex-merchant 
officers  will  consider  me  scandalously  extravagant.  I  know,  however, 
that  no  merchant  skipper  would  hesitate  to  take  the  Antigone  to  sea 
in  peace  times  with  a  crew  of  that  size,  and  I  believe  that,  with  a  well- 
trained  crew  accustomed  to  the  ship  and  her  installations,  four  guns' 
crews  at  the  outbreak  of  war  would  make  her  fit  to  do  the  duty  she 
has  been  performing  since  December,  1917,  as  a  transport. 

PROPOSED    COMPLEMENT    U.  S.  C.  S.  '' ANTIGONE." 

In  command,  1  lieutenant  commander. 

1  lieutenant.  1 

1  lieutenant  (junior  grade)  meek  officers. 

1  ensign.  J 

1  lievitenant  commander,  chief  engineer. 

3  machinists  or  chief  machinists. 
1  boatswain. 

1  carpenter. 

1  medical  officer  (rank  of  lieutenant). 

1  supply  officer  (rank  of  lieutenant). 

1  pay  clerk  (rolls  and  manifests). 

1  pay  clerk  (commissary  and  general  storekeeper). 

1  chief  quartermaster,  1  chief  boatswain's  mate,  1  chief  coxswain,.  S  chief 
yeomen,  6  chief  machinists'  mates,  1  chief  carpenter^s  mate,  1  ehiei 
pharmacist's  mate;  or  14  chief  petty  officers. 

4  quartermasters  (2  first  class,  2  third  class). 

2  boatswain's  mates,  first  class. 
10  coxswains. 

10  yeomen  (2  first  class,  2  second  class,  6  third  class). 

12  machinist's  mates  (6  first  class,  6  second  class). 

4  electricians. 

2  carpenter's  mates,  first  class. 

1  pharmacist's  mate,  first  class. 

6  storekeepers,  first  and  second  class. 

6  water  tenders. 

6  oilers. 

6  firemen,  first  class. 

12  firemen,  second  class. 

120  firemen,  third  class. 

1  boiler  maker. 

1  plumber. 

1  coppersmith. 

20  seamen;  30  seamen,  second  class;  2  officers'  stewards;  4  officers'  cooks; 

4  ships'  cooks;  10  mess  attendants. 
Total,  14  officers,  288  enlisted  men. 

Annual  pay  roll $175, 000 

Annual  rations 52,  560 

Annual  coal  (6  voyages,  .Found  trips) 66,  000 

Annual  stores 5^'  000 

343, 560 
Plus  20  per  cent  overhead 68,  712 

Total  cost,  annual - 412, 272 


AMEKICAN   MEBCHANT   MARINE.  19 

At  6  voyages  per  year  (12  runs),  and  allowing  that  the  ship  is 
loaded  to  an  average  of  75  per  cent  capacity,  the  Antigone  should 
haul  60,000  tons  per  year. 

Hence  we  have  an  average  haulage  cost  of  S6.87  per  ton,  and  must 
use  the  ship  on  a  run  where  she  can  normally  expect  to  receive  a 
freight  tariff  sUghtly  in  advance  of  that.  One  guess  is  enough^re- 
member  that  $22  per  ton  coffee  and  110-shilling  coal. 

Our  first  regular  service  would  look  something  like  this: 

Philadelphia  to  Trinidad  (12  knots),  6  days. 

At  Trinidad,  1  day. 
Trinidad  to  Para,  5  days. 

At  Para,  ^  day. 
Para  to  Bahia,  3^  days. 

Bahia  to  Rio  de  Janeiro,  3  days  (run  down  12^  days). 
Lay-over  at  Rio,  4  days. 
Rio  to  Bahia,  3  days. 

At  Bahia,  1  day. 
Bahia  to  Para,  3^  days.- 

At  Para,  1  day. 
Para  to  Trinidad,  5  days. 

At  Trinidad,  1  day. 
Trinidad  to  Philadelphia  (or  Baltimore),  6  days  (run  back  20^  days). 
Total  round  trip  voyage,  44  days;  overhaul,  16 days;  total,  60  days,  or  six 
voyages  per  year. 

And  so: 

UNITED    STATES    COMMERCE    NAVY. 

Beginning  January  1,  1920,  the  following  schedules  will  be  placed 
in  effect: 

Philadelphia  to  Rio  de  Janeiro  via  Trinidad,  Para,  and  Bahia.     Ships  Pocahontas y 
Madaivaska,  Aeolus.     Sailings  on  the  1st  and  20th  of  each  month. 
Freight  rates:  Per  ton. 

To  Trinidad $6.  00 

To  Para 12.  00 

To  Bahia 14.  00 

To  Rio. 16.  00 

Trinidad  to  Para 6. 00 

Trinidad  to  Bahia 8.  00 

Trinidad  to  Rio .- • 10.  00 

Para  to  Bahia 2.  00 

Para  to  Rio 4.  00 

Bahia  to  Rio 2.  00 

Passenger  rates: 

To  Trinidad 65.  00 

To  Para 100.  00 

To  Bahia 125.  00 

To  Rio 150.  00 

Beginning  January  10,  1920: 

Baltimore  to  Rio  de  Janeiro  via  Trinidad,  Para,  and  Bahia.  Ships  Antigone,  Sus- 
quehanna, Huron.  Sailings  on  the  10th  and  30th  of  each  month.  Freight  and  passen- 
ger rates  as  above. 

That  undercuts  present  rates  by  nearly  50  per  cent  and,  in  fact, 
is  below  normal;  and  we  find  that  we  will  clear,  not  counting  any 
passenger  traffic  which  may  come  our  way,  $5.13  average  on  60,000 
tons  for  each  of  the  above  six  ships,  or  $1,846,800  per  annum  on  six 
of  our  slowest  and  oldest  ships.  Interest  on  $46,170,000  worth  of 
Liberty  bonds. 


20  AMERICAN   MERCHANT  MARINE. 

Next,  the  west  coast  of  South  America,  Since  the  opening  of  the 
Panama  Canal  and  the  consequent  shortening  of  this  run  by  some 
7,000  miles,  our  best  schedule  would  seem  to  be  something  like  this: 

From  New  Orleans  to  Valparaiso,  De  Kalb,   Martha  Washington,  Princess 

Matoiha.     Sailings  on  the  Ist  and  20th. 
From  Mobile  to  Valparaiso,   Covington,   Mercury.  Powhatan.     Sailings  on 

the  10th  and  30th. 
Time  consumed  in  voyage  (12  knots): 
United  States  to  Colon,  5  days. 

Canal,  1  day. 
Panama  to  Guayaquil,  3  days. 

At  Guayaquil,  1  day. 
Guayaquil  to  Callao,  3  days. 

At  Callao,  1  day. 
Callao  to  Valparaiso,  5  days. 
Layover  at  Valparaiso,  5  days. 

Total  length  of  voyage,  43  days;  overhaul,  17  days;  total,  (50  days,  or 
6  voyages  per  year. 

As  the  above  ships  will  perhaps  average  a  few  tons  less  than  the 
Rio  ships,  we  can  not  expect  to  clear  more  than  a  million  and  a  half 
from  this  run;  but  that  accounts  for  the  interest  on  $37,500,000  more 
Liberty  bonds. 

Our  traffic  de  luxe  must  necessarily  be  between  New  York,  Monte- 
video, and  Buenos  Aires,  and  on  this  run  we  will  put  our  best,  George 
Washington,  Agamemnon,  America,  Mount  Vernon,  President  Grant, 
and  Von  Steuben.  They  will  sail  every  10  days,  and  they  will  average 
16  knots  while  under  way.  They  will  touch  at  the  same  ports  as 
the  Rio  ships,  in  order  to  allow  those  who  wish  to  pay  for  a  luxurious 
passage  to  give  up  their  money,  but  the  bulk  of  their  work  and 
practically  all  of  their  freight  will  come  from  the  far  end  of  the  run 
at  the  maximum  charge  of  $18  per  ton.  This  line  figures  to  a  clear 
netting  of  two  and  a  quarter  millions  per  annum,  even  at  its  enor- 
mously increased  coal  consmnption,  and  takes  care  of  over  fifty-six 
millions  more  of  our  bond  debt. 

It  is  not  claimed  that  the  initial  voyages  will  produce  revenue  at 
any  such  rate.  It  is  stated  unequivocally,  however,  that  as  soon  as 
the  ships  appear,  the  waiting  market  will  begin  feverishly  to  work 
to  keep  them  on  the  run,  and  that  within  12  months  we  will  be  load- 
ing very  near  to  full  capacity.  Does  anyone  who  has  recently  visited 
South  America  dispute  it  ? 

•       7,500-TON   CLASS. 

The  complement  of  these  ships  can  be  reduced  easily  by  4 
officers  (2  pay  clerks,  1  watch  officer,  1  machinist  or  chief  machinist) 
and  125  men,  leaving  them  to  operate  with  10  officers  and  163  men. 
Estimating  their  pay  and  rations  on  this  basis,  their  coal  consumption 
as  the  same  and  their  necessary  stores  at  75  per  cent  of  the  passenger 
vessels,  we  get  an  annual  upkeep  and  overhead  of  $275,400.  In 
other  words,  to  pay  for  themselves  they  must  haul  an  annual  55,000 
tons  at  an  average  of  $5  per  ton.  Fifty-five  thousand  tons  is  11 
normal  one-way  runs  of  such  a  ship,  and  when  the  length  of  the  usual 
$5  per  ton  water  haul  is  considered,  11  runs  per  year  is  a  very  lazy 
rate  of  working.  These  vessels  will  be  the  last  of  our  freighters 
to  leave  the  European  lanes  in  normal  course,  and  perhaps  they 
never  will  leave  them.     If  they  do,  there  is  plenty  of  tea  in  Formosa 


AMERICAN  MERCHANT  MARINE.  21 

to  load  them  to  their  last  ounce  at  considerably  more  than  $5  per 
ton,  and  when  the  tea  is  gone  there  is  camphor,  there  is  sugar  from 
Honolulu  and  all  the  loot  of  the  China  coast,  north  and  south,  and 
there  are  the  southern  islands.  We  will  never  lose  money  on  these 
ships. 

With  the  '^western''  type  of  ships  our  coal  consumption  and  com- 
plement upkeep  drop  rapidly  in  comparison  to  haulage.  A  pay  roll 
of  $45,000,  rations  of  $14,500,  coal  and  stores  not  over  $50,000, 
plus  our  20  per  cent  overhead,  make  them  cost  us  $131,400  per  year 
apiece,  or  27,000  tons  at  $5  per  ton.  Ask  anyone  in  Argentine,  ask 
the  Guggenheims,  ask  the  Palmer  Syndicate,  how  much  freight  they 
can  give  us  at  twice  that  figure  to  any  Atlantic  port.  Ask  any  of 
them  how  many  times  27,000  tons  per  year  we  may  count  on  from 
the  jogging,  port-to-port,  cabbage-and-barrel-of-water  trade  around, 
through  the  canal  and  back?  The  '^westerns,"  moreover,  are  ideal 
copra  ships. 

Every  little  '4ake"  ship  we  own  wiU  find  herseK  busy  at  home 
and  visiting  the  near  neighbors.  Coast-to-coast  and  the  West 
Indies  and  Central  America  furnish  the  field  of  endeavor  for  these 
little  fellows,  and  at  the  year's  end  they  will  be  turning  in  a  balance 
sheet  that  will  cause  our  swagger  passenger  trade  to  shake  its  head 
and  read  the  figures  over  again. 

When  we  have  finished  our  first  12  months  as  international  mer- 
chants, only  the  worst  of  luck  coupled  with  an  extraordinary  visita- 
tion of  business  stupidity — and  this  has  never  been  counted  an  Ameri- 
can weakness — will  prevent  us  from  realizing  that  we  have  (1)  more 
friends  and  better  ones;  (2)  much  more  trade  and  more  profitable 
trade;  (3)  a  dependable,  sizable  Naval  Reserve  which  has  cost  us  just 
exactly  nothing.  And  last  but  not  least,  we  are  apt  to  find  that  we 
have  taken  the  first  liberty  loan  off  the  hands  of  the  taxpayer 
entirely,  are  paying  him  his  interest  and  laying  up  his  principal 
against  the  maturity  of  his  bonds. 

We  must  prepare  the  plans  and  be  ready  to  answer  the  questions 
of  Congress.  Do  you  believe  that  they  will  hesitate  to  give  us  free 
rein  in  this  matter,  once  it  is  fairly  put  up  to  them  ?  A  great  deal  has 
been  said  in  the  public  press  about  every  Congress  from  the  Fiist 
to  the  present  assembly;  but  among  those  things  has  never  been 
an  accusation  jbhat  they  refused  to  permit  lawful,  legitimate  dollars 
to  enter  the  Treasury  of  the  United  States.  A  great  many  gentle- 
men are  gravely  stating  that  the  United  States  can  not  profitably 
compete  with  the  shipping  of  other  nations.  Perhaps  not;  but  here, 
in  our  hand,  is  opportunity  to  make  our  ships  profitable  while  avoid- 
ing competition  with  that  shipping. 

The  opportunity  is  fleeting.  In  five  years  it  will  no  longer  exist. 
In  two  years,  if  America  acts  quickly,  the  firm  of  ''America  &  Sons, 
shipowners,"  will  be  the  greatest  dividend-paying  concern  in  the 
world.     Can  America  afford  to  bury  her  talent  ? 


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